Loan features

How to pay off your mortgage faster: can you really do it in 10 or 7 years?

What it takes to pay off a $600,000 mortgage in 25, 15, 10 or 7 years, and what extra repayments, offset, fortnightly payments and refinancing can change.

Updated: 9 November 2026
Read time: 9 min read
Prepared by: emoney content team

Key checks before you decide

Prepared by emoney content team. Updated 9 November 2026. Sources are listed below.

Find your current balance, rate, remaining term and minimum repayment on your latest statement or app.
Work out how much spare money you can commit each month after bills, debts and an emergency buffer.
Ask your lender whether extra repayments are allowed, capped or charged for, and how redraw works.
If you refinance, ask for a term no longer than the years you have left on your current loan.

In this guide7 sections

Start with the arithmetic: what each payoff target costs per month Real interest savings versus simply paying more What $500 a month extra, an offset balance or fortnightly repayments can do Offset or redraw: where spare money sits matters Refinancing to a lower rate can shorten the loan, or add years Paying off the mortgage or investing, and what a budget plan can change A realistic plan and the questions to ask

Example

Start with the arithmetic: what each payoff target costs per month

Paying off a mortgage in 10 or 7 years is possible, but it means paying much more each month. The table shows the monthly repayment needed to clear a $600,000 principal and interest loan over different terms.

We used 6.2% a year because the Reserve Bank's lending rates table (F6) shows an average rate of 6.2% on new owner-occupier variable loans funded in September 2026. The RBA has since raised the cash rate by 0.25 percentage points on 30 September and again on 4 November 2026, so many variable rates are now higher. Your own rate may be higher or lower, so treat 6.2% as an illustrative rate only.

Assumptions: the rate stays at 6.2% for the whole loan, repayments are monthly, and there are no fees, offset balances or rate changes. Figures are rounded. Your lender's own calculation may differ slightly because most lenders calculate interest daily.

The 7-year target needs about $8,823 a month, or roughly $105,900 a year in loan repayments alone. That is about $5,148 a month more than the 30-year repayment. For most households, that is the real question: can your budget carry the higher repayment through rate rises, job changes and family costs?

Loan term	Monthly repayment	Extra per month vs 30 years	Total interest paid
30 years	$3,675	$0	about $722,900
25 years	$3,939	$265	about $581,800
20 years	$4,368	$693	about $448,300
15 years	$5,128	$1,453	about $323,100
10 years	$6,722	$3,047	about $206,600
7 years	$8,823	$5,148	about $141,100

Real interest savings versus simply paying more

Finishing in 7 years instead of 30 cuts the interest bill in this example by about $581,800. That saving is real, but it comes from paying the principal back much sooner, which needs about $5,148 extra every month. No account structure or repayment method removes principal without your own money going in.

Interest is charged on the balance you still owe. Every dollar that comes off the balance early stops costing interest for the rest of the loan. That is why MoneySmart notes that extra payments made in the early years of a loan reduce the interest you pay over the life of the loan.

So when a plan promises a much shorter loan, look for where the extra money comes from. It is usually one or more of: higher repayments, lump sums such as a bonus or tax refund, savings kept in an offset account, or spending cut from the household budget. A lower interest rate is the only lever that saves interest without you paying more, and only if you keep repayments at the old level.

Regulators have acted on this kind of marketing before. In November 2014 ASIC accepted an enforceable undertaking from a financial planning company over advertising that included the line 'Pay off your 25 year home loan in less than 5 years.' ASIC said misleading credit advertising can create unrealistic expectations that may lead to poor financial decisions.

A short payoff period is a possible outcome for some households with high income, low costs or a large lump sum. It is not a typical result and nobody can guarantee it.

Example

What $500 a month extra, an offset balance or fortnightly repayments can do

This second example starts with the same $600,000 loan at 6.2% over 30 years, with the minimum repayment of about $3,675 a month. Each row changes one thing and keeps everything else the same.

Paying $500 a month extra clears the loan in about 22 years instead of 30 and saves about $223,700 in interest. That saving comes with roughly $132,000 of extra repayments ($500 a month for about 22 years), so the extra money is doing the work.

A $50,000 offset balance kept untouched from day one saves about $214,700, because interest is charged on $550,000 instead of $600,000. The loan balance falls to $50,000 after about 24 years, so you could close the loan then by using the offset savings. The catch is keeping that balance in place for decades.

Fortnightly repayments help only because of the amount. Paying half the monthly repayment every fortnight means 26 half payments a year, which is the same as 13 monthly repayments instead of 12. If you simply split the same yearly total into fortnights, the saving in this example is under $2,000 over 30 years. Adding one twelfth of a repayment (about $306) to each monthly payment gives almost the same result as the fortnightly method.

To test your own numbers, use the extra repayments calculator and the offset account calculator. They give estimates only and do not reflect your lender's exact interest method or fees.

Change to the 30-year loan	Approximate time to repay	Interest saved vs minimum repayments
Minimum repayment only ($3,675 a month)	30 years	$0 (about $722,900 interest paid)
$250 a month extra	about 25 years 3 months	about $134,900
$500 a month extra	about 22 years	about $223,700
$1,000 a month extra	about 17 years 8 months	about $335,900
$50,000 kept in offset from the start	about 24 years (when the balance equals the offset)	about $214,700
Half the monthly repayment every fortnight ($1,837)	about 24 years 5 months	about $159,500
Same yearly total split into fortnights ($1,696)	about 30 years	under $2,000

Offset or redraw: where spare money sits matters

An offset account and a redraw facility can both reduce interest, but they work differently. Choose based on fees, access and how you behave with money that is easy to reach.

An offset account is a transaction account linked to the loan. MoneySmart's example: with a $750,000 loan and $50,000 in offset, you are only charged interest on $700,000. Your savings stay in a separate account you can use. Offset is generally offered with variable loans, and some banks charge for it through a higher interest rate, account fees or both. MoneySmart suggests it may not be worth paying for if you usually keep a low balance and the loan costs more because of the offset feature.

A redraw facility lets you take back extra repayments you have made into the loan. Some lenders limit how much you can redraw, charge a fee or delay access. Money in redraw is part of the loan, so it is a little less tempting to spend, but also a little harder to reach in an emergency.

Check that an offset account is actually linked. An ASIC review found some customers may have paid more interest than they should because some banks failed to manage offset accounts properly, and the problem can go unnoticed because repayments stay the same. Look for the offset saving in your app, online banking or statements, and contact your bank if you cannot see it.

If the home might become an investment property later, get tax advice before choosing. The ATO's ruling TR 2000/2 says the deductibility of interest on redrawn money depends on what that money is used for. The ruling covers redraw, not offset, so ask a registered tax agent how each would be treated in your situation.

Our offset vs redraw guide covers the structure in more detail.

What does the offset feature cost each year, including any higher rate or package fee?
Is the offset 100% or partial, and is it linked to this loan split?
Are there minimums, fees, limits or delays on redraw?
Are extra repayments allowed on a fixed rate, and up to what amount?

Watch out

Refinancing to a lower rate can shorten the loan, or add years

A lower rate saves interest. Whether it helps you finish sooner depends on the repayment and term you choose after switching. MoneySmart warns that without care you can end up with a longer loan term than the years left on your current mortgage.

In this example the borrower is 5 years into the 30-year loan above and owes about $559,700. A lower rate of 5.7% is used only to show the effect of a 0.5 percentage point difference. It is not a rate offer. Switching costs, such as discharge, application or break fees, and any lenders mortgage insurance are left out, and they reduce the benefit.

Keeping the old repayment on the lower rate gives the biggest gain. Resetting to a fresh 30-year term gives the lowest monthly repayment but the highest total interest, and the loan finishes 35 years after it started.

Before you switch, ask your current lender whether it will lower your rate. If you do move, compare fees, features and the break-even point, and ask for a term that matches the years you have left. Our guides on refinancing costs and when to refinance explain those checks.

Option after 5 years	Monthly repayment	Time left	Interest from here
Stay at 6.2%	$3,675	25 years	about $542,800
Switch to 5.7%, keep paying $3,675	$3,675	about 22 years 8 months	about $437,100
Switch to 5.7% over 25 years	$3,504	25 years	about $491,600
Switch to 5.7% over a new 30 years	$3,248	30 years	about $609,700

Next step

Want a broker to check this against your situation?

Share the loan goal, timing and a few key details. An emoney broker can then pick up the enquiry with the relevant context.Ask a broker to check your loan

Broker note

Paying off the mortgage or investing, and what a budget plan can change

Every dollar in offset or paid off the loan avoids interest at your home loan rate. Investing the same dollar may earn more or less, with risk, and tax and super rules matter. Which suits you is a personal financial advice question.

A mortgage broker can help with the loan side: rate, structure, features and repayments. Whether to invest instead of paying down the home loan is a question for a licensed financial adviser or accountant who can look at your whole position.

A cash-flow plan can help you find the money to repay faster. Tracking spending, cutting costs and clearing higher-interest debt first can all free up money. MoneySmart's credit card guide, last updated 26 August 2026, puts the average credit card interest rate at over 18%, much higher than home-loan rates. A plan cannot create money you do not have, and any program or coaching fees reduce what is left to put on the loan.

Keep a buffer. Money locked in a loan with redraw limits, or a repayment set so high that one bad month causes stress, can leave you worse off. MoneySmart also suggests avoiding interest-only repayments if you can, because the debt does not go down during the interest-only period.

A realistic plan and the questions to ask

Pick a monthly amount you can keep paying when rates or circumstances change, put it towards the loan or offset, and review the loan each year. An emoney broker can compare loan options and help with an application; the lender decides the rate, features and approval.

Write down your target and the date you want the loan cleared, then work backwards with the calculator to the monthly amount. If that number does not fit your budget, a smaller amount over a longer period still saves interest.

emoney holds Australian Credit Licence 386 494 and supports borrowers Australia-wide by phone and online.

This is general information only. It does not take account of your objectives, financial situation or needs, and it is not a recommendation about a particular loan or strategy.

What is my current rate, and will my lender lower it if I ask?
Can I make extra repayments without fees or caps on this loan?
Does my loan have an offset account, what does it cost, and is it linked correctly?
If I refinance, what will the term be, and what are the total switching costs?
What repayment can I keep up if rates rise or my income drops?

Calculator next step

Extra repayments calculator

See how paying more than the minimum may reduce total interest and shorten the loan term.

Best for: Testing whether spare cash flow could change the long-term loan path.
What it calculates: Potential interest saved and loan time reduced from recurring or one-off extra repayment assumptions.

A broker still needs to check fixed-rate limits, redraw access, offset alternatives, fees, and loan structure.

Open Extra repayments

Sources used

Pay off your mortgage faster
ASIC MoneySmartofficial sourceChecked 9 November 2026
Mortgage offset accounts
ASIC MoneySmartofficial sourceChecked 9 November 2026
Switching home loans
ASIC MoneySmartofficial sourceChecked 9 November 2026
Choosing a credit card
ASIC MoneySmartofficial sourceChecked 9 November 2026
Cash rate target
Reserve Bank of Australiaofficial sourceChecked 9 November 2026
Statistical table F6: Housing lending rates (CSV, published 6 November 2026)
Reserve Bank of Australiaofficial sourceChecked 9 November 2026
14-297MR ASIC review prompts enforceable undertaking over home loan advertising
ASICofficial sourceChecked 9 November 2026
TR 2000/2: deductibility of interest on line of credit and redraw facilities
Australian Taxation Officeofficial sourceChecked 9 November 2026

General information only

This guide is general information and does not take into account your objectives, financial situation, or needs. A broker can review your circumstances before any recommendation.